Gaining Momentum Against Patent Trolls: A 2013 Timeline

from the the-snowball-effect dept

Post sponsored by

The term "patent troll" has been kicking around for about 20 years now (at least according to Wikipedia's etymology), and that's about how long it's taken for the problem to really start getting attention in the broader political world. Progress is, of course, a little slow: tech startups and lots of other companies still face frivolous patent litigation as a major threat and, in many sectors, an inevitable "tax on success." But at the same time, the big picture of 2013 is one of significant progress and growing awareness on multiple fronts:

February: Obama Makes Unexpected Overtures & SHIELD Is Re-IntroducedDuring a Google Plus "Fireside Hangout" early this year, the president was asked about patent reform, and gave gave a somewhat surprising answer that would turn out to be an overture for bigger things to come. It was the first clear statement from the administration acknowledging that patent trolls are a problem.

Meanwhile, as expected, the SHIELD Act (allowing the victims of patent trolls to seek legal fees) was re-introduced — and again it turns out this wasn't the last we'd be hearing on that front.

April: Rackspace Takes On Erich SpangenbergCalling him "the most notorious patent troll in America," Rackspace hit back against a lawsuit from Spangenberg by catching him in his own tangled web of agreements. Every year, companies prove increasingly less willing to roll over and settle when the patent trolls come a-knocking, and that pattern alone could be enough to make the whole scam more trouble than it's worth.

May: Legislation, Legislation EverywhereAt the beginning of May, Senator Chuck Schumer introduced a bill that would make it cheaper and easier to get tech patents reviewed by the USPTO. Then, later in the month, Rep. Ted Deutch introduced a bill that would take an important tool away from patent trolls by preventing them from hiding behind shell companies. Then Senator John Cornyn introduced the Patent Abuse Reduction Act with more troll-busting measures, and Rep. Bob Goodlatte released a patent discussion draft.

In the end, four different pieces patent-related legislation were proposed in May, making five so far in 2013. As usual, there were good and bad aspects to most of them — but the important thing was the amount of attention and discussion being given to the issue as a whole. (Also, while all that was happening, the state of Vermont quietly passed a new law targeting patent trolls, and promptly sued one under it.)

June: The White House Doubles DownFollowing up on the hints dropped in February, the Obama administration got serious about patent trolls. Obama released a multi-part plan utilizing executive actions (as well as requests to Congress) to start tackling the problem. At the same time, the White House released a report about the broken patent system, with some data showing just how big the troll problem has become.

More In June: The Chief Patent Judge Chimes InThe CAFC, which handles appeals on all patent cases, doesn't always seem aware of just what's going on with the patent system. So it was a little unexpected when CAFC chief judge Randall Rader wrote an NY Times op-ed highlighting the patent troll problem. As we noted at the time, it would be nice to see this realization expressed in the court through better rulings and precedents — but for now, the recognition is an encouraging first step.

Still More In June: The FTC's Gloves Come OffA June Supreme Court ruling that focused on pharmaceutical pay-for-delay deals had an important side effect: it allowed the FTC to go after patent trolls — and it didn't take long for the FTC to exercise that ability. Later the same week, the FTC announced a sweeping investigation of patent trolls and their business practices. Though patent trolls are often adept at manipulating the courts, they are less prepared for an attack from that angle, and it's going to be very interesting to see what the FTC does.

July: One More Bill Appears In CongressFinally, just a couple of weeks ago, Reps. Darrell Issa and Judy Chu introduced the STOP Act, which would extend the USPTO's power to aggressively review business method patents. The legislation is closely related to Schumer's bill from May, and brings the total number of anti-patent-troll bills introduced in 2013 to six.

All told, 2013 is looking like the year when the walls are starting to seriously close in on patent trolls. Of course, like most people who game the legal system, they have a tendency for tenacity, but they're also driven by the desire for easy money. There's no need to make patent trolling impossible, just unprofitable — and it's encouraging to see companies, congress, the courts, the administration and agencies like the FTC all making steps in that direction.

The real reason why patent lawsuits are at a 10-year high

The Medimmmune decision in 2007 made it impossible for patent owners to just call up an infringer and work out a deal over the phone; now, everything ends up in court:

"MedImmune lowered the bar for determining declaratory judgment jurisdiction in all patent cases. Since MedImmune, the Federal Circuit has found jurisdiction in nearly every case involving communications between parties. This makes it difficult for lawyers to advise clients on what they can say to competitors without triggering an actual controversy, and a potential lawsuit."

Re: It's difficult to define "unprofitable"

Patent Trolls

"Patent trolls" are really Patent Knights, protecting the patent rights of independent inventors and small companies that do not have the financial resources to engage in a legal battle with a large company. Without Patent Knights, large companies could continue to run roughshod over the patents of individual inventors. If you don't like Patent Knights, try suggesting a better way to let independent inventors monetize their patents. It is unrealistic to expect most independent inventors to quit their jobs, raise capital, and become entrepreneurs who make and distribute what they invented.

It is surprising that any software can be patented because patents by definition apply to products, which are reproduced or manufacturing processes. Here is a quote from the UK IPO site:

Some computer-implemented inventions are patentable whilst others are not. This is because software straddles the technological and business worlds. It uses technology, that is, computers, but often for non-technical purposes. Whether a computer-implemented invention is patentable depends on the contribution the invention makes. For example, if it provides improved control of a car braking system, it is likely to be patentable, but if it merely provides an improved accounting system, it is probably not patentable.

Online technology is bringing international patenting together and the US is now falling into line with the UK. For any inventors out there, good books are Dummies and David Pressman plus Amazon have a great little ebook on DIY patenting online internationally.